이 기사는 2019년 11월 15일 08:00 thebell 에 표출된 기사입니다.

South Korea's deal activities have slowed down sharply in the second half of the year, raising concerns over lack of investment opportunities next year among domestic M&A advisors and private equity firms.

M&A activities in the country have fallen by more than 30 percent in the first nine months of the year to 53.7 trillion won ($46 billion) compared to the same period in 2018, according to data compiled by the bell plus based on deals that have completed. The amount is also below the total deal value of 59.2 trillion won in the first three quarters of 2017. In the figure, all M&A transactions were counted, including those that financial advisory firms did not involve.

Based on deals that financial advisors involved, M&A activities are also set to decline this year, with total deal value in the first three quarters amounting to only 39 trillion won ($33 billion). The total M&A transaction value for the entire year of 2017 and 2018 was at 41.3 trillion won and 59.6 trillion won, respectively. This year, the domestic M&A market made a good start in the first quarter, with total deal value of 20.5 trillion won, though deal activities have continued to slow down since then.

In addition, fewer deals are expected to complete in the fourth quarter due to transactions that have been canceled or postponed. Among others, South Korea's game giant Nexon withdrew its plan to sell a controlling stake worth over 10 trillion won ($8.5 billion) this summer. Other trillion-won-size deals that were expected to close within the year are also likely to slip into next year.

For example, LG Group's telecommunications arm LG Uplus selected Viva Republica, the operator of P2P money transfer app Toss, as the preferred bidder for the sale of its payment gateway operation unit a month ago, but since then the progress of the final negotiation has been slow. Hanwha Group also put its food service unit up for sale this summer and held the bidding, though the preferred bidder has not been announced yet due to the pricing gap between the seller and bidders. Hanwha reportedly is still in talks with CJ Freshway, CJ Group's food distribution and catering affiliate that is considered a prime candidate among other potential buyers.

Among deals announced in the second half of the year, a consortium of Hyundai Development Company (HDC) and Mirae Asset Daewoo has recently won the bid for a controlling stake in Asiana Airlines, though the deal is unlikely to close within the year, considering the length of time for a negotiation. So is the Woongjin Coway deal, where mobile games maker Netmarble is expected to sign a share purchase agreement to buy about 25 percent stake in the water purifier rental firm in a few days.

The Medit deal is one of the major transactions that contributed to increase M&A deal value in the fourth quarter. The South Korean 3D dental scanner maker decided to sell its controlling stake to Unison Capital last month in a deal expected to close within November.

LG Group is also expected to sign the deal with Macquarie PE to sell its stake in LG CNS, its IT system unit. The bid for acquiring SKC Kolon PI, a joint venture between SKC and Kolon Industries, has turned into a two-way battle between Hahn & Company and Glenwood PE, after the bidding round last Monday. Both deals are likely to complete early next year if everything goes smoothly.

With deal activity in the country continuing to stagnate, private equity firms including leading players are busy sourcing new deals. Worries over lack of deals in the pipeline are increasing among deal makers in the M&A market.

"M&A deals are particularly difficult to expect. But this year is one of the worst. Deals are so rare in the market despite plenty of liquidity," said an industry insider.

(By reporter Han Hee-yeon)